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Tuesday, Oct 25, 2005


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Jessop gets orders for 809 wagons — Supply gap in bogie, couplers

Pratim Ranjan Bose

Kolkata , Oct. 24

JESSOP & Co is now suffering from a problem of plenty. It has received an order for a record 809 wagons this year up from 305 wagons last year. The coach division which received order for nine rakes (81 coaches) last year, is also expecting a considerable increase this year.

While the company is confident of its wagon making abilities, the order book position has brought in its wake some problems. The most prominent is the non-availability of bogie and couplers, an essential component in wagons.

According to company sources, Jessop's supply schedule had suffered a setback last year, due to wide demand-supply gap in bogie and couplers.

"The problem is not unique to Jessop, but a few other manufacturers as well. Bogie and coupler was previously not included in the list of free supplies.

"However, the total production of railway's approved manufacturers of such components falls substantially short of the wagon procurement projections.

"Naturally, we could hardly get these components in the open market," said the Chairman of Jessop, Mr Pawan Ruia.

To sort out the problem in the future, the group had acquired the plant and machinery of the closed bogie and coupler making facility of Mukund Industries last year, and is now busy in implementing the plant. "However, despite our best efforts, the plant is unlikely to start commercial production before the next fiscal," said Mr Ruia.

To meet the immediate need for such components and maintain the delivery schedule, Jessop and a few other private wagon makers have recently approached the Indian Railways to include bogie and coupler in the list of free supplies. "The railways has so far favoured our proposal. We are hopeful that the problem could successfully be tackled this year ensuring on-time delivery of wagons to the Indian Railways."

Rights issue: The Rs 50-crore rights issue of Jessop will remain open between October 26 and November 1. The issue will be at par and at a ratio of 5.5:1. The company has already reduced the face value of the shares from Rs 10 to Re 1. The issue proceeds would make the company's networth positive, and is expected to bring it out of BIFR net.

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